Ashford Hospitality Trust Inc · NYSE:AHT
Ashford Hospitality Trust — FBR Conference December 2013
40 slides from Ashford Hospitality Trust's conference presentation, Dec 3, 2013
Slide 1: FBR Conference – December 2013
1 FBR Conference – December 2013
Slide 2: Safe Harbor
2 Safe Harbor In keeping with the SEC's "Safe Harbor" guidelines, certain statements made during this presentation could be considered forward-looking and subject to certain risks and uncertainties that could cause results to differ materially from those projected. When we use the words "will likely
Slide 3: Strong Track Record & Performance
Strong Track Record & Performance 3
Slide 4: Demonstrated 10-Year Track Record
4 Demonstrated 10-Year Track Record 49% 84% 48% 39% 86% 107% 37% 70% 38% -20% -31% -5% 8% 68% -40% -20% 0% 20% 40% 60% 80% 100% 1-Yr 2-Yr 3-Yr 4-Yr 5-Yr 6-Yr 7-Yr 8-Yr 9-yr 10-yr Total Shareholder Return AHT Peer Avg 127% 140% • Disciplined growth, operational expertise, and strong capital allocatio
Slide 5: Asset Management Outperformance
5 Asset Management Outperformance • Ashford Trust and pro forma Ashford Prime consistently outperform public peers in hotel EBITDA flow-through. Peers include: CHSP, DRH, FCH, HST, HT, INN, LHO, PEB, RLJ, SHO. Source: Company filings. 90% 64% 56% 70% 104% 63% 65% 54% 39% 48% 53% 41% 0% 20% 40% 60% 8
Slide 6: Highly-Aligned Management
19% 19% 4% 4% 4% 4% 3% 3% 2% 2% 2% 2% 1% 1% 0% 5% 10% 15% 20% 25% O w n ersh ip P erce n ta g e 6 Highly-Aligned Management • With insider ownership* of approximately 19%, management is highly-aligned with shareholder interests. Public Lodging REITs include: BEE, CHSP, CLDT, DRH, FCH, HST, HT, INN,
Slide 7: Experienced Management Team
7 Experienced Management Team Demonstrated Capital Markets Expertise and Timing Proven Acquisition, Disposition and Financing Capabilities Extensive Network for Transaction Sourcing Strong Asset Management Track Record Branding Expertise and Relationships Affiliated Hotel Property Manager Adds Value
Slide 8: Industry Overview
“= Industry Overview aT. A. ASHFOR ZA ASHFORD ® ASHFORD S Ri]
Slide 9: Historical Industry Stock Returns
• Historically, attractive returns remain for investors from this point in the lodging cycle. 9 Historical Industry Stock Returns % 50% 100% 150% 200% 250% 300% 350% 0 12 24 36 48 60 72 84 96 108 T S R Months from Peak to Peak 1989-1997 1997-2007 2007-Current Index includes AHT, BEE, DRH, FCH, HST,
Slide 10: Attractive Supply/Demand Imbalance
• Demand expected to exceed supply through at least 2015. 10 Attractive Supply/Demand Imbalance -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 2005 2006 2007 2008 2009 2010 2011 2012 2013F 2014F 2015F Y ea r- o v e r- Y ea r % Gro w th Supply vs. Demand Supply Growth Demand Growth PKF Forecast Source: PKF
Slide 11: Real RevPAR
• Real RevPAR remains well below the previous peak and each recent new peak has exceeded prior cycles. 11 Real RevPAR Source: Smith Travel Research $54.00 $56.00 $58.00 $60.00 $62.00 $64.00 $66.00 $68.00 $70.00 $72.00 $74.00 $76.00 Seasonally-Adjusted Real RevPAR (as of September 2013) Average 3-mo
Slide 12: 5-Year RevPAR Growth Forecast
7.7% 6.1% -2.0% -16.7% 5.4% 8.2% 6.8% 6.1% 7.7% 8.5% 5.3% 2.3% -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% Historical RevPAR Growth Forecasted RevPAR Growth RevPAR Forecast - PKF 12 5-Year RevPAR Growth CAGR: 6.0% Source: Smith Travel Research & PKF
Slide 13: Potential Industry EBITDA Growth Rates
Potential Industry EBITDA Growth Rates 13 • With strong potential RevPAR gains, those companies with reasonable flow-throughs could experience significant EBITDA growth • PKF estimates 2-year cumulative EBITDA growth of about 33%* *Based on PKF RevPAR/ADR/Occupancy projections and EBITDA growth resu
Slide 14: Projected Hotel Room Value Growth
14 Projected Hotel Room Value Growth Source: JLL/HVS $0 $10 $20 $30 $40 $50 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 $110,000 $120,000 $130,000 $140,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 U .S . H o te l T ra n sa ct io n V o lume in $B il
Slide 15: Compelling Opportunity
Compelling Opportunity “ZA ASHFO ASHFORD ©
Slide 16: Transaction Overview
16 Transaction Overview 123 Hotels 25,716 Rooms TTM RevPAR: $103 TTM Hotel EBITDA: $391.8mm 8 Hotels 3,146 Rooms TTM RevPAR: $147 TTM Hotel EBITDA: $77.0mm 115 Hotels 22,569 Rooms TTM RevPAR: $97 TTM Hotel EBITDA: $314.8mm 20% Ownership of Ashford Prime Taxable Spin-Off Contributed Capital Purchase
Slide 17: Differentiated Investment Strategy
17 Differentiated Investment Strategy Ashford Prime Ashford Trust Investment Focus High-quality, high-RevPAR hotels in major markets with RevPAR of at least 2x the national average All segments of the hospitality industry excluding the high-RevPAR hotels targeted by Ashford Prime Investment Type Dir
Slide 18: Ashford Hospitality Trust
Ashford Hospitality Trust 18
Slide 19: Company Snapshot
Company Snapshot 19 Portfolio Statistics* Total Enterprise Value $3.5 B Total Gross Assets $4.0 B # of Hotels 115 # of Owned Rooms 22,569 # of Property Managers 5 $ ADR $133.29 $ RevPAR $96.88 Financial Statistics* Recent Share Price $8.48 (11/20/13) # Fully Diluted Shares 99.6 M Leverage Ratio 61.5
Slide 20: Portfolio Overview – Ashford Trust
Portfolio Overview – Ashford Trust 20 5% 55% 3% 37% Chain Scale* Luxury Upper Upscale Upper Midscale Upscale 29% 4% 6% 50% 5% 6% Brand Family* Hilton Hyatt Starwood Marriott IHG Independent 67% 18% 15% MSA* Top 25 Top 50 Other *TTM 9/30/13 EBITDA
Slide 21: Low Risk on Balance Sheet
21 Low Risk on Balance Sheet $0 $500 $1,000 $1,500 2013 2014 2015 2016 2017 2018+ De b t M a tu ri ti e s (mm 's ) Ashford Trust TTM EBITDA Yield: 11.8% 12.6% 12.4% 11.6% 14.6% Source: Company filings. Debt balances and EBITDA yields reflect the Company’s pro rata share as of 9/30/13. All debt is no
Slide 22: Pier House Resort & Spa – Case Study
22 Pier House Resort & Spa – Case Study 3 Months Prior Year(1) 3 Months Post-AHT Purchase(1) Variance $ Variance % RevPAR $232.28 $260.09 $27.80 12% Total Revenue $3,994,710 $4,374,128 $379,418 9.5% EBITDA $895,575 $1,529,955 $634,380 70.8% EBITDA Flow 167.2% (1) Post-AHT takeover is June-August 201
Slide 23: Pier House - Stated Price Option
23 Pier House - Stated Price Option • Ashford Prime's option to acquire Pier House Resort & Spa over the next 18 months is expected to be value enhancing. Purchased May 2013 Original Acquisition Price = $90 million 3-month operational improvement in EBITDA = $634,380 Transaction EBITDA multiple = 14
Slide 24: Ashford Trust Photo Gallery
Ashford Trust Photo Gallery 24 Renaissance Palm Springs Hilton Santa Fe Ritz-Carlton Atlanta Downtown Marriott San Antonio Plaza Renaissance Portsmouth Hilton Nassau Bay Hilton Boston Back Bay The Churchill
Slide 25: Ashford Hospitality Prime
Ashford Hospitality Prime 25
Slide 26: Company Snapshot
Company Snapshot 26 Portfolio Statistics* Total Enterprise Value $941 M Total Gross Assets $920 M # of Hotels 8 # of Owned Rooms 3,146 # of Property Managers 2 $ ADR $187.46 $ RevPAR $146.60 Financial Statistics* Recent Share Price $21.14 (11/20/13) # Fully Diluted Shares 24.9 M Net Debt/EBITDA 6.3x
Slide 27: Portfolio Overview – Ashford Prime
Portfolio Overview – Ashford Prime 27 37% 63% Chain Scale* Upscale Upper Upscale 29% 71% Brand Family* Hilton Marriott 100% MSA* Top 25 *TTM 9/30/13 EBITDA
Slide 28: Ashford Prime Overview
28 Ashford Prime Overview High Quality Hotel Portfolio •Geographically diversified and concentrated predominantly in top 20 U.S. markets •Premium portfolio RevPAR of $147 •Strong market share as evidenced by RevPAR penetration index of 110.7; 6 of the 8 hotels rank either 1st or 2nd in their competi
Slide 29: Ashford Prime Properties
29 Ashford Prime Properties San Francisco San Francisco Courtyard 405 Rooms Seattle Marriott Seattle Waterfront 358 Rooms Seattle Courtyard 250 Rooms Philadelphia Philadelphia Courtyard 498 Rooms Dallas Marriott Plano Legacy 404 Rooms San Diego Hilton Torrey Pines 394 Rooms Hotel Market Rooms Ritz-C
Slide 30: RevPAR & EBITDA multiples
30 RevPAR & EBITDA multiples • There is a strong correlation between RevPAR and EBITDA multiples. • We have not determined that there is any statistical evidence of the effect of external management on valuation of equity REITs. R² = 0.8672 10.0x 11.0x 12.0x 13.0x 14.0x 15.0x 16.0x 17.0x $50 $70 $90
Slide 31: Market Capitalization & EBITDA multiples
31 Market Capitalization & EBITDA multiples • There is no correlation between Equity Market Capitalization and EBITDA Multiple for the Hotel REIT universe. R² = 0.0005 10.0x 11.0x 12.0x 13.0x 14.0x 15.0x 16.0x 17.0x $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 EBI T D A M u lt ip le Mark
Slide 32: Ashford Prime Debt & Liquidity
32 Ashford Prime Debt & Liquidity $0 $500 $1,000 $1,500 2013 2014 2015 2016 2017 2018+ De b t M a tu ri ti e s (mm 's ) Ashford Prime TTM EBITDA Yield: 13.3% 12.8% Source: Company filings. Debt balances and EBITDA yields reflect the Company’s pro rata share as of 9/30/13. All debt is non-recourse St
Slide 33: Ashford Prime Photo Gallery
Ashford Prime Photo Gallery 33 Tampa Renaissance Marriott Seattle Waterfront Hilton La Jolla Torrey Pines Courtyard Seattle Downtown Capital Hilton Marriott Plano Legacy Philadelphia Courtyard San Francisco Courtyard
Slide 34: Well Positioned For Growth
34 Well Positioned For Growth • Unique built in pipeline of option hotels and right of first offer hotels • Targeted acquisitions consistent with investment guidelines • Internal growth from asset performance • Opportunistic, value add transactions • Internal growth from asset performance • Excess c
Slide 35: Appendix
Appendix ZA ASHFORD A ASHFORD D 48
Slide 36: Management biography: Mr. Kessler
Mr. Kessler is the President of Ashford Hospitality Advisors and serves as the President of both Ashford Hospitality Trust (NYSE: AHT) and Ashford Hospitality Prime (NYSE: AHP). He is currently on the Board of Directors of AHP, and was previously on the Board of Directors of AHT. Mr. Kessler has spe
Slide 37: Experienced Management
37 Experienced Management David A. Brooks Chief Operating Officer, General Counsel & Secretary David J. Kimichik Chief Financial Officer Mr. Brooks is the chief Operating Officer, General Counsel & Secretary of Ashford Hospitality Advisors and serves as Chief Operating Officer, General Counsel & Sec
Slide 38: Experienced Management
38 Experienced Management Deric S. Eubanks Senior Vice President, Finance J. Robison Hays Senior Vice President, Corporate Strategy & Finance Mr. Eubanks is the Senior Vice President of Finance of Ashford Hospitality Advisors and serves as the Senior Vice President of finance of both Ashford Hospita
Slide 39: Experienced Management
39 Experienced Management Jeremy J. Welter Executive Vice President of Asset Management Mark L. Nunneley Chief Accounting Officer Mr. Welter is the Executive Vice President of Asset Management of Ashford Hospitality Advisors and serves as the Executive Vice President of Asset Management of both Ashf
Slide 40: FBR Conference – December 2013
40 FBR Conference – December 2013
Ashford Hospitality Trust — FBR Conference December 2013 on 6ix